The Oregon Supreme Court last week struck down key 2013 legislative reforms to the Oregon Public Employee Retirement System (PERS) that would have saved taxpayers billions of dollars.
The Court in effect added some $5 billion back to the unfunded liability of the PERS system, which will now stand at over $14 billion. If not offset by new taxes or spending reductions elsewhere, public bodies such as school districts and state agencies will have to allocate even more of their budgets to pay for worker retirement benefits.
Before most Oregonians understood that the state retirement system was headed for trouble, Cascade Policy Institute published a 2001 report which concluded that “PERS is almost guaranteed to fall into steep unfunded liabilities over and over again because of its design.”
This conclusion was seconded last week when EcoNorthwest economist John Tapogna noted that “Oregon made a generational mistake in public policy, and the Supreme Court has essentially ruled that we have to live with it.” He noted, “That puts Oregon in a challenging economic position for the next couple of decades.”
The best way to keep such generational mistakes from happening again is to limit the size and scope of government so that future politicians have less control over our lives. Let’s make the $14 billion PERS generational mistake our last.
Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy think tank.